In Empirical Analyses of Factors That Help Explain Wages

question 317

Multiple Choice

In empirical analyses of factors that help explain wages,

• A)effort and ability are not likely to contribute to large differences in wages in the U.S. economy.
• B)economists typically find that measurable factors explain less than half of the variation in wages.
• C)economists typically find few factors that are not explicitly measurable.
• D)unmeasurable influences on wage differences are found to be quite small.

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Definitions:

Underlying Asset

The specific financial instrument (e.g., stock, bond, commodity) on which a derivative's value is based.

Puts

A type of option contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specific time frame.

Strike Price

The fixed price specified in an options contract at which the holder can buy or sell the underlying asset.

Black-Scholes Model

A mathematical model used for pricing European-style options, estimating the variation over time of financial instruments.